A(n) comparison deals with relationships and comparisons between a pair of things or ideas.
A comparison is a linguistic or cognitive process that involves examining the similarities or differences between two things or ideas. It allows us to understand the relationship between them and evaluate their characteristics or qualities in relation to each other.
In language, comparisons are often expressed using comparative forms or words such as "more," "less," "better," "worse," "than," etc. For example, when we say "John is taller than Mark," we are making a comparison between John and Mark's height, stating that John has a greater height.
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Different stages of team development require different roles for leadership. Using models or frameworks from your course, demonstrate 1) understanding of the different stages of team development and 2) a critical explanation of the different roles at each stage.
The role of leadership changes at each stage of team development, from building trust and rapport in the forming stage to providing support and guidance in the performing stage.
** The Different Stages of Team Development
1. Forming: This is the initial stage of team development, where team members are getting to know each other and learning about the team's goals. The leader's role in this stage is to help team members build trust and rapport, and to clarify the team's goals and expectations.
2. Storming: This is the second stage of team development, where team members may start to disagree and conflict with each other. The leader's role in this stage is to help team members manage conflict and to build consensus.
3. Norming: This is the third stage of team development, where team members have started to resolve their conflicts and have developed a sense of norms and expectations. The leader's role in this stage is to help team members work together effectively and to maintain the team's momentum.
4. Performing: This is the fourth and final stage of team development, where team members are working together effectively and efficiently. The leader's role in this stage is to provide support and guidance, and to ensure that the team is meeting its goals.
** The Different Roles for Leadership at Each Stage
1. The role of leadership changes at each stage of team development. In the forming stage, the leader's role is to help team members build trust and rapport.
2. In the storming stage, the leader's role is to help team members manage conflict and to build consensus. The leader can do this by facilitating discussions, helping team members to see each other's perspectives.
3. In the norming stage, the leader's role is to help team members work together effectively and to maintain the team's momentum. The leader can do this by providing support and guidance, and by helping team members to resolve any issues that may arise.
4. In the performing stage, the leader's role is to provide support and guidance, and to ensure that the team is meeting its goals. The leader can do this by monitoring the team's progress, providing feedback, and helping the team to overcome any challenges that may arise.
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Larkspur Inc. has issued three types of debt on January 1,2020 , the start of the company's fiscal year. (a) \$10 million, 11-year, 14\% unsecured bonds, interest payable quarterly. Bonds were priced to yield 10%. (b) \$27 million par of 11-year, zero-coupon bonds at a price to yield 10% per year. (c) $20 million, 11-year, 9% mortgage bonds, interest payable annually to yield 10%.
(a) The unsecured bond have a face value of $10 million, a maturity of 11 years, a stated interest rate of 14%, and were priced to yield 10%. Interest is payable quarterly.
(b) The zero-coupon bonds have a par value of $27 million, a maturity of 11 years, and were priced to yield 10% per year.
(c) The mortgage bonds have a face value of $20 million, a maturity of 11 years, a stated interest rate of 9%, and were priced to yield 10%. Interest is payable annually.
(a) The unsecured bonds have a face value of $10 million, a maturity of 11 years, and a stated interest rate of 14%. However, they were priced to yield 10%, meaning investors will purchase them at a discount. The interest is payable quarterly.
(b) The zero-coupon bonds have a par value of $27 million and a maturity of 11 years. Since they are zero-coupon bonds, they do not pay periodic interest but are issued at a discount to yield 10% per year.
(c) The mortgage bonds have a face value of $20 million, a maturity of 11 years, and a stated interest rate of 9%. However, they were priced to yield 10%, which means investors will purchase them at a discount. The interest is payable annually.
These debt issuances represent different types of bonds with varying terms and structures, but they all have in common the fact that they were priced to yield 10% to attract investors. The interest payment frequency and rates differ based on the specific terms of each bond.
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Using your research skills, identify an organization that you
consider to have a unique approach to performance management.
Describe the company's process, including the
factors that make it unique.
One organization that stands out for its unique approach to performance management is Adobe Inc. Their performance management process, known as the Check-in, focuses on regular feedback and continuous growth rather than traditional annual reviews.
This approach emphasizes open communication, goal setting, and coaching, making it distinct from conventional performance appraisal systems.
Adobe's performance management process, the Check-in, replaces traditional annual performance reviews with ongoing conversations between managers and employees. Instead of relying on a one-time evaluation, the Check-in encourages frequent check-ins throughout the year. These check-ins serve as opportunities for managers to provide feedback, discuss progress on goals, and address any challenges or development needs.
What makes Adobe's approach unique is its emphasis on continuous feedback and growth. The Check-in process prioritizes open communication, enabling employees to have meaningful conversations with their managers regarding their performance, career aspirations, and areas for improvement. It promotes a coaching and development-oriented culture, where managers act as mentors and supporters rather than evaluators.
Additionally, the Check-in process at Adobe aligns individual goals with the company's overall objectives. It encourages employees to set clear and measurable goals that are regularly reviewed and adjusted as needed. This ensures that employees' efforts are aligned with organizational priorities, fostering a sense of purpose and engagement.
Overall, Adobe's Check-in performance management process stands out for its focus on regular feedback, continuous growth, and goal alignment. By fostering open communication, coaching, and development, this approach promotes a culture of learning and improvement, ultimately driving employee engagement and organizational success.
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Graded Assignment 2: Fresh Food Fresh Food is an omnichannel grocery retailer with stores in Phoenix, Arizona. The company wants to design its online grocery business to allow customers two fulfillment options: A. Click-and-Collect (CC): To pick up their online orders from a store, or B. Home Delivery (HD): Have them delivered to their home address. To fulfill these two CC and HD orders, Fresh Foods has four alternatives: A. Pickup: Ship online orders to a store where customers pick them up, B. Direct Delivery: Deliver orders directly from a regional DC (RDC) close to the Phoenix market using company’s fleet of trucks, C. Delivery from In-Market DC (IMDC): Build an intermediary DC inside the Phoenix market. And, ship orders from RDC to IMDC, and then to customer homes, D. Outsourced Delivery: Have a third-party deliver orders from the RDC to customer homes. The challenge is which channel to utilize for which type of order, given that each option has different costs and capacity limitations. Monthly demand: The company estimates that it will have 600 Click-and-Collect orders and 800 Home Delivery orders. Note we must fulfill all demand. Facility cost: The cost of opening and maintaining the IMDC is $1000 per month, irrespective of the quantity of orders processed. Note: Please be sure to use the sum of demand as your big number (M). Using too high values may lead to errors in Excel. Part 1 0.0/2.5 points (graded) Capacity: IMDC, if built, can process 100 orders per month. The RDC and the 3rd party provider do not have a capacity limit. Transportation costs (dollar per order) between facilities and to customers are given below:
Destination
Destination
Origin IMDC Store Customer Home
(via owned fleet) Customer Home
(via 3rd party carrier)
RDC 2 2 10 11
IMDC - - 4 -
What is the optimal monthly total cost? Enter your answer below. Please enter the total amount in dollars with no commas or currency signs. For example, if your answer is $1,568,987.25 then you would enter 1568987. unanswered SaveSave your answer Submit You have used 0 of 2 attemptsSome problems have options such as save, reset, hints, or show answer. These options follow the Submit button. Part 2 0.0/2.5 points (graded) Now assume the IMDC has a capacity of 1000 orders per month. What is the optimal monthly total cost? Enter your answer below. Please enter the total amount in dollars with no commas or currency signs. For example, if your answer is $1,568,987.25 then you would enter 1568987. unanswered
To determine the optimal monthly total cost, we need to consider the transportation costs and capacities of the different fulfillment options.
Let's calculate the optimal costs for both Part 1 and Part 2.Part 1:
Monthly demand:
Click-and-Collect (CC) orders = 600
Home Delivery (HD) orders = 800
Facility cost:
IMDC = $1000 per month
Capacity:
IMDC = 100 orders per month
Transportation costs (dollar per order):
Destination | IMDC | Store | Customer Home (via owned fleet) | Customer Home (via 3rd party carrier)
Origin
RDC | 2 | 2 | 10 | 11
IMDC | - | - | 4 | -
To calculate the optimal monthly total cost, we need to determine the fulfillment options for each type of order (CC and HD) and the corresponding transportation routes.
CC orders can be fulfilled by Pickup (ship online orders to a store where customers pick them up) or Direct Delivery (deliver orders directly from RDC using company's fleet of trucks).
Transportation cost for Pickup:
IMDC to Store = $2 per order
Transportation cost for Direct Delivery:
RDC to Store = $2 per order
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2. Analyzing Transactions (economic events)
a. Step 1: Identify the accounts affected by the transaction, and what type of account they are.
b. Step 2: Determine if the accounts are increasing and decreasing.
c. Step 3: Record the increase or decrease into the tabular analysis.
Remember, we only record transactions if the financial position (assets, liabilities or owner's equity) of the company are changed.
Practice Exercise:
Select transactions for Drake Company are as follows:
1. Made cash investments to start a business.
2. Purchased equipment on account.
3. Incurred advertising expense on account.
4. Paid salaries.
5. Billed customers for services performed.
Instructions: For each transaction, describe the effect of each transaction on assets, liabilities and owner's equity.
1. Cash investments to start a business:
- Assets: Increase
- Liabilities: None
- Owner's equity: None
2. Purchased equipment on account:
- Assets: Increase
- Liabilities: Increase
- Owner's equity: None
3. Incurred advertising expense on account:
- Assets: None
- Liabilities: Increase
- Owner's equity: None
4. Paid salaries:
- Assets: Decrease
- Liabilities: None
- Owner's equity: None
5. Billed customers for services performed:
- Assets: Increase
- Liabilities: None
- Owner's equity: Increase
The first transaction involves cash investments to start a business. This increases the company's assets because cash is considered an asset. The second transaction is the purchase of equipment on account, which increases both assets and liabilities. Assets increase because equipment is acquired, and liabilities increase because the purchase was made on account, creating a payable. The third transaction is the incurring of advertising expense on account, which increases expenses and liabilities.
The expense is recorded to reflect the cost of advertising, and since it is on account, it creates a payable. The fourth transaction is the payment of salaries, which decreases assets. Salaries are an expense and result in a decrease in cash, which is an asset. Finally, the fifth transaction involves billing customers for services performed. This increases both assets and owner's equity. Assets increase because the company is entitled to receive payment from customers, and owner's equity increases because revenue is recognized.
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Other things equal, the price of a stock put option is positively correlated with which of the following factors?
The time to expiration, stock volatility, and exercise price
The stock price
The stock volatility
The time to expiration
The exercise price
The price of a stock put option is positively correlated with the stock volatility and the time to expiration.
The stock volatility is a measure of the price fluctuations of the underlying stock. Higher volatility increases the potential for larger price swings, which increases the value of the put option as it provides the holder with the right to sell the stock at a predetermined price.
The time to expiration is also positively correlated with the price of a put option. With a longer time to expiration, there is a higher probability that the stock price may fall below the exercise price, increasing the value of the put option.
On the other hand, the stock price itself and the exercise price of the option have an inverse relationship with the price of a put option. As the stock price rises, the likelihood of the stock falling below the exercise price decreases, reducing the value of the put option. Similarly, a higher exercise price makes it less likely for the stock to drop below that price, decreasing the value of the put option.
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Suppose Levered Bank is funded with 1.7% equity and 98.3% debt. Its current market capitalization is $9.75 billion, and itsmarket-to-book ratio is 0.9 . Levered Bank earns a 4.21% expected return on its assets (the loans it makes), and pays 3.8% on its debt. New capital requirements will necessitate that Levered Bank increase its equity to 3.4% of its capital structure. It will issue new equity and use the funds to retire existing debt. The interest rate on its debt is expected to remain at 3.8%. a. What is LeveredBank's expected ROE with 1.7% equity? b. Assuming perfect capitalmarkets, what will Levered Bank's expected ROE be after it increases its equity to 3.4%? c. Consider the difference between Levered Bank's ROE and its cost of debt. How does this "premium" compare before and after the Bank's increase in leverage? d. Suppose the return on Levered Bank's assets has a volatility of . What is the volatility of Levered Bank's ROE before and after the increase in equity? e. Does the reduction in Levered Bank's ROE after the increase in equity reduce its attractiveness toshareholders? Explain.
a. Levered Bank's expected ROE with 1.7% equity is approximately 2.47%.
b. Levered Bank's expected ROE after increasing its equity to 3.4% is approximately 1.176%.
c. The "premium" has increased from approximately -1.33% to -2.624% after the increase in leverage, indicating a higher cost for equity holders.
d. The volatility of Levered Bank's ROE is approximately 5.882 before the increase in equity and approximately 2.941 after the increase in equity.
e. With the increase in equity and the associated reduction in leverage, the ROE decreases.
a. To calculate Levered Bank's expected ROE with 1.7% equity, we can use the formula:
ROE = Net Income / Equity
Since Levered Bank is funded with 1.7% equity and 98.3% debt, we can assume that the total capital structure is 100%.
Therefore, the equity portion would be 1.7% of the total capital structure.
ROE = (Expected Return on Assets - Interest Expense) / Equity
Given that the expected return on assets is 4.21% and the interest expense is 3.8%, we can calculate the expected ROE:
ROE = (0.0421 - 0.038) / 0.017
ROE ≈ 2.47
Therefore, Levered Bank's expected ROE with 1.7% equity is approximately 2.47%.
b. After increasing its equity to 3.4%, the new ROE can be calculated in a similar manner:
ROE = (Expected Return on Assets - Interest Expense) / Equity
The equity portion is now 3.4% of the total capital structure.
ROE = (0.0421 - 0.038) / 0.034
ROE ≈ 1.176
Therefore, Levered Bank's expected ROE after increasing its equity to 3.4% is approximately 1.176%.
c. The difference between Levered Bank's ROE and its cost of debt can be seen as the "premium" earned by the equity holders.
Before the increase in leverage, the ROE was 2.47% (from part a) and the cost of debt was 3.8%.
Therefore, the premium was:
Premium = ROE - Cost of Debt
Premium = 2.47% - 3.8%
Premium ≈ -1.33%
After the increase in equity, the new ROE is 1.176% (from part b), and the cost of debt remains the same at 3.8%. The new premium is:
Premium = ROE - Cost of Debt
Premium = 1.176% - 3.8%
Premium ≈ -2.624%
The "premium" has increased from approximately -1.33% to -2.624% after the increase in leverage, indicating a higher cost for equity holders.
d. The volatility of Levered Bank's ROE can be calculated using the formula:
Volatility of ROE = Volatility of Return on Assets / Equity
The volatility of the return on assets is given as 0.1 (or 10%). We can calculate the volatility of ROE before and after the increase in equity:
Before: Volatility of ROE = 0.1 / 0.017 ≈ 5.882
After: Volatility of ROE = 0.1 / 0.034 ≈ 2.941
Therefore, the volatility of Levered Bank's ROE is approximately 5.882 before the increase in equity and approximately 2.941 after the increase in equity.
e. The reduction in Levered Bank's ROE after the increase in equity may reduce its attractiveness to shareholders.
A higher ROE generally indicates higher profitability and return on investment for shareholders.
However, with the increase in equity and the associated reduction in leverage, the ROE decreases.
This may be viewed as a decrease in the potential returns for shareholders and could make the bank less attractive compared to other investment options.
Shareholders typically seek higher returns on their investments, and a lower ROE may impact their investment decisions.
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Markum Enterprises is considering permanently adding an additional $98 million of debt to its capital structure. Markum's corporate tax rate is 21%. a. Absent personal taxes, what is the value of the interest tax shield from the new debt? b. If investors pay a tax rate of 37% on interest income, and a tax rate of 20% on income from dividends and capital gains, what is the value of the interest tax shield from the new debt? Question content area bottom Part 1 a. Absent personal taxes, what is the value of the interest tax shield from the new debt? In the absence of personal taxes, the value of interest tax shield from new debt should be $ enter your response here million. (Round to two decimal places.)
(a) The value of the interest tax shield from the new debt should be $20.58 million. (Round to two decimal places.)
(b) The value of the interest tax shield from the new debt should be $7.412 million. (Round to two decimal places.)
a) Interest tax shield can be defined as a deduction in taxable income that arises from the interest expense incurred by the firm on its debt.
The value of the interest tax shield from the new debt should be $20.58 million.
(Round to two decimal places.)
b)With personal taxes, the value of the interest tax shield from new debt can be calculated as follows:
First, we need to determine the interest expense of Markum Enterprises.
Interest expense = Interest rate x Amount of debt
= 0.98 × 98 million
= $96.04 million
Second, we need to determine the value of the interest tax shield = Interest expense x Tax rate
= 96.04 x 0.21
= $20.1684 million
Let's assume investors pay a tax rate of 37% on interest income, and a tax rate of 20% on income from dividends and capital gains.
The value of the interest tax shield from the new debt is calculated as follows:
Interest expense = Interest rate x Amount of debt
= 0.98 x 98 million
= $96.04 million
Value of interest tax shield = Interest expense x Corporate tax rate
= $96.04 million x 0.21
= $20.1684 million
We can calculate the after-tax cost of debt as follows:
Interest expense × (1 − Personal tax rate) × Corporate tax rate
= $96.04 million × (1 − 0.37) × 0.21
= $12.84 million. (Round to two decimal places.)
The value of the interest tax shield from the new debt can be calculated as follows:
Interest expense x Corporate tax rate x (1 − Personal tax rate)× Personal tax rate
= $96.04 million × 0.21 × (1 − 0.37) / (1 − 0.63)
= $7.412 million. (Round to two decimal places.)
Hence, the value of the interest tax shield from the new debt should be $7.412 million. (Round to two decimal places.)
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Amazon proves to be highly competitive, even against giants like
Walmart.
Assess the possible generic strategies which are responsible for
their growth and expansion.
Amazon's growth and expansion can be attributed to the implementation of several generic strategies, including cost leadership, differentiation, and focus.
One of the key strategies employed by Amazon is cost leadership. The company has focused on optimizing its operational efficiency and supply chain management, allowing it to offer competitive prices to customers. Amazon leverages economies of scale, advanced technology, and innovative logistics solutions to minimize costs and provide value to consumers.
Additionally, Amazon has successfully differentiated itself in the market. It has built a strong brand image centered around convenience, customer service, and a vast product selection. The company has invested heavily in technology and innovation, introducing services like Amazon Prime, one-day shipping, and its own line of electronic devices (e.g., Kindle, Echo). These differentiators have attracted customers and created a loyal customer base.
Furthermore, Amazon has also adopted a focused approach by targeting specific market segments. For instance, it has expanded into various industries beyond e-commerce, such as cloud computing with Amazon Web Services (AWS) and entertainment with Amazon Prime Video. By diversifying its offerings and catering to different customer needs, Amazon has been able to capture new markets and sustain its growth.
In conclusion, Amazon's success can be attributed to a combination of cost leadership, differentiation, and focus strategies. The company's emphasis on operational efficiency, technological innovation, customer-centricity, and market diversification has enabled it to compete effectively against established giants like Walmart.
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A taxpayer recently called our office and indicated she was interested in being a surrogate mother. Her idea was to carry the baby for a fee (not unusual). She would carry the fertilized egg for biological father and mother. I was very impressed by what a giving person she was. She thanked me, but indicated she was not that giving, since the fee was $50,000. She further indicated the $50,000 fee is tax free due to the pain and suffering she incurred delivering a baby. While I am a father of four, I cannot personally relate to the pain and suffering. Would the payments be tax free? When she is "out of work" could she collect unemployment? What about workers compensation?
The $50,000 fee received by the taxpayer for being a surrogate mother would likely not be considered tax-free.
While the taxpayer may have undergone pain and suffering during the delivery, the fee received for the surrogacy arrangement is generally considered compensation for services rendered, rather than damages for personal injury. As a result, it would be subject to taxation as ordinary income.
The tax treatment of payments received for being a surrogate mother is determined by the nature of the payments. In this case, the $50,000 fee is not likely to qualify as tax-free. Generally, payments received for providing services, such as being a surrogate mother, are considered taxable income. While the taxpayer may have experienced pain and suffering during the delivery process, the fee is seen as compensation for services rendered rather than damages for personal injury. Therefore, it would be subject to taxation as ordinary income.
Regarding unemployment benefits, eligibility is typically based on being available and actively seeking work. If the taxpayer is temporarily "out of work" after the surrogacy arrangement, she may be eligible to collect unemployment benefits if she meets the relevant requirements, such as actively searching for a new job.
However, workers' compensation benefits are generally not applicable in the case of self-inflicted injuries or situations where the individual willingly assumes risks. As being a surrogate mother is a voluntary arrangement, it is unlikely that the taxpayer would be eligible for workers' compensation benefits based solely on the surrogacy activities.
It is important to note that tax laws and regulations can vary by jurisdiction, and it is advisable for the taxpayer to consult with a qualified tax professional or seek specific guidance from the relevant tax authority to understand the tax implications and eligibility for benefits in their particular situation.
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Written Problem 1: Morris Company, a small manufacturing firm, wants to acquire a new machine that costs $30,000. Arrangements can be made to lease or purchase the machine. The firm is in the 40% tax bracket. The firm has gathered the following information about the two alternatives: Lease: Morris would obtain a five-year lease requiring annual end-of-year lease payments of $10,000. The lessor would pay all maintenance costs; insurance and other costs would be borne by the lessee. Morris would be given the right to exercise its option to purchase for $3,000 at the end of the lease term Purchase: Morris can finance the purchase of the machine with an 8.5% five-year loan requiring annual end-of -year installment payments. The machine would be depreciated under MACRS using a five-year recovery period. The exact depreciation rates over the next six periods would be 20%, 32%, 19%, 12%, 12% and 5% respectively. Morris would pay $1200 per year for a service contract that covers all maintenance costs. The firm plans to keep the machine and use it beyond its five-year recovery period. a. Calculate the after-tax cash outflow from the lease for Morris Company. Show your work. b. Calculate the annual loan payment. Show your work. c. Determine the interest and principal components of the loan payments. Show your work. d. Calculate the after-tax cash outflows associated with the purchasing option. Show your work. e. Calculate and compare the present values of the cash outflows associated with both the leasing and purchasing options. Show your work. f. Which alternative is preferable? Explain
a. The after-tax cash outflow from the lease for Morris Company can be calculated by subtracting the tax savings from the lease payments. The lease payments are $10,000 per year, and since the lessor pays all maintenance costs, there are no additional expenses. The tax savings can be calculated as the lease payments multiplied by the tax rate (40%):
Tax savings = Lease payments * Tax rate
Tax savings = $10,000 * 0.40
Tax savings = $4,000
After-tax cash outflow from the lease = Lease payments - Tax savings
After-tax cash outflow from the lease = $10,000 - $4,000
After-tax cash outflow from the lease = $6,000
b. The annual loan payment can be calculated using the formula for the present value of an annuity. The loan amount is $30,000, the interest rate is 8.5%, and the loan term is five years:
Annual loan payment = Loan amount / Present value annuity factor
Annual loan payment = $30,000 / 3.9935 (from the present value annuity factor table)
Annual loan payment = $7,508.14
c. The interest component of the loan payments can be calculated by multiplying the loan balance at the beginning of each year by the interest rate. The principal component can be calculated by subtracting the interest component from the annual loan payment. The loan balance at the beginning of each year can be calculated by subtracting the accumulated depreciation from the initial loan amount:
Year 1:
Interest component = Loan balance (Year 1) * Interest rate
Principal component = Annual loan payment - Interest component
Year 2-5:
Interest component = Loan balance (Year n) * Interest rate
Principal component = Annual loan payment - Interest component
d. The after-tax cash outflows associated with the purchasing option include the annual loan payment, the service contract cost, and the tax savings from depreciation. The service contract cost is $1,200 per year. The tax savings from depreciation can be calculated by multiplying the accumulated depreciation for each year by the tax rate.
e. The present values of the cash outflows associated with both the leasing and purchasing options can be calculated by discounting the after-tax cash outflows using an appropriate discount rate. The present value is calculated by dividing the cash outflow by (1 + discount rate) raised to the power of the number of years.
f. To determine which alternative is preferable, compare the present values of the cash outflows for leasing and purchasing. The option with the lower present value would be the more favorable choice. Additionally, consider other factors such as the company's financial situation, future plans, and the specific benefits or drawbacks of each option.
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A firm has a capital structure of 100% equity. An analyst has estimated the firm's beta as 1.20, and current market conditions feature a risk-free rate of 2%, and a market portfolio risk premium of 6%. The firm is considering the following project:
- Invest $60 million today
- The project will have a cash flow of $5 million in the first year, and cash flows will grow by 5% each year for a 20 -year period. W
hat is projected NPV for this project?
NPV or Net Present Value is an investment performance metric that measures the difference between the current value of the expected cash inflows and the current value of the expected cash outflows over a specific time period.
It can be calculated using the formula given below:NPV = Σ [CFt / (1 + r)t] - Initial Investment Where, CFt = Cash Flow in year t,r = Discount rate, andt = year. The firm has a capital structure of 100% equity. Hence, the cost of equity is considered as the discount rate to calculate the NPV of the project.
The CAPM formula can be used to calculate the cost of equity as follows:Required Rate of Return on Equity = Risk-Free Rate + Beta × Market Risk Premium Given, β = 1.20Risk-free rate = 2%Market Portfolio Risk Premium = 6%Cost of Equity = 2 + 1.20 × 6%Cost of Equity = 9.2%Using the NPV formula,Projected NPV = Σ [CFt / (1 + r)t] - Initial Investment Projected NPV = $42,580,402.85 (rounded off to nearest $)Hence, the projected NPV for this project is approximately $42,580,402.85.
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Choose an organization (it can be from one of the case studies you will research or any other company). Delve into their organizational philosophy of culture and change and respond to the following:
Include a specific or concrete example of how this organization promotes and/or adopts to change,
Describe their cultural atmosphere,
Have they been successful with their culture and change? How do they measure their success? How would you measure it?
Relate back to at least one of the readings from this week or a previous week's material
Provide any/all references
The requirement guidelines for each discussion question are as follows:
Students must post a substantive, thoughtful, response to the question. Minimum of three (3) paragraphs
Microsoft Corporation's culture of change is grounded in the principles of agile management. The company's focus on experimentation, risk-taking, and innovation is consistent with the principles of agile management.
Organization: Microsoft Corporation
Organizational philosophy of culture and change:
Microsoft Corporation is one of the world's leading technology companies and is recognized for its culture of change. The company's organizational philosophy of culture and change is centered on the fact that the business is driven by the need to meet and exceed customer expectations. Microsoft Corporation focuses on maintaining a growth mindset culture that supports innovation and learning. The company's culture of change encourages employees to experiment and take risks that can lead to breakthroughs in technology.
Example of how Microsoft Corporation promotes and/or adopts change:
Microsoft Corporation promotes and adopts change by ensuring that its employees have access to the tools and resources they need to perform their jobs effectively. One example of how the company promotes and/or adopts change is the introduction of its Microsoft Teams platform. The platform was introduced as a way for the company to enable remote working and collaboration among its employees. Through Microsoft Teams, employees can collaborate on projects and communicate with each other in real-time.
Cultural atmosphere:
The cultural atmosphere at Microsoft Corporation is centered on innovation and creativity. The company values the ideas and contributions of its employees and encourages them to experiment and take risks. Microsoft Corporation has a culture that is focused on growth and learning. The company encourages its employees to pursue their passions and provides opportunities for them to develop new skills and expertise.
Success with culture and change:
Microsoft Corporation has been successful with its culture and change efforts. The company has been recognized for its innovative products and services, and its employees are recognized for their contributions to the industry. Microsoft Corporation measures its success by evaluating customer satisfaction, employee engagement, and financial performance. The company also uses key performance indicators (KPIs) to measure the effectiveness of its culture and change initiatives.
Relate back to a reading:
One of the readings that is relevant to Microsoft Corporation's culture and change efforts is the article "Transforming Your Organization with Agile" by Dr. John J. Sullivan. The article discusses the benefits of agile management in promoting innovation and change within an organization.
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A $140,000 mortgage amortized by monthly payments over 25 years is renewable after five years
(a) If interest is 5.26% compounded semi-annually, what is the size of each monthly payment?
(b) Find the total interest paid during the first year.
(c) Compute the interest included in the 25th payment.
(d) If the mortgage is renewed after five years at 6.35% compounded semi-annually, what is the size of the monthly payment for the renewal period?
(e) Construct a partial amortization schedule showing details of the first three payments for each of the two terms.
The size of each monthly payment for a $140,000 mortgage amortized over 25 years at an interest rate of 5.26% compounded semi-annually can be calculated using the formula for mortgage payments. By plugging in the values and solving the equation, the monthly payment amount can be determined.
To find the total interest paid during the first year, we need to calculate the interest portion of each monthly payment. This is done by multiplying the outstanding balance of the mortgage by the monthly interest rate. Since there are 12 payments in the first year, adding up the interest portions of these payments gives us the total interest paid during that year.
To compute the interest included in the 25th payment, we first need to find the outstanding balance of the mortgage after 24 payments. This can be done by calculating the present value of the remaining payments using the monthly interest rate and the remaining number of payments. Then, multiplying the outstanding balance by the monthly interest rate gives us the interest portion of the 25th payment.
If the mortgage is renewed after five years at a new interest rate of 6.35% compounded semi-annually, we can use a similar approach to calculate the size of the monthly payment for the renewal period. The remaining balance after five years becomes the new present value, and the remaining number of months in the mortgage term is used to determine the number of payments.
To construct a partial amortization schedule showing the details of the first three payments for each of the two terms, we would calculate the principal and interest portions of each payment. Starting with the initial mortgage amount, we subtract the principal portion from each payment to find the outstanding balance after each payment. The interest portion is calculated using the monthly interest rate and the outstanding balance. This process is repeated for the first three payments of each term to create the amortization schedule.
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Retirement Funding. Barry has just become eligible for his employer-sponsored retirement plan. Barry is 35 and plans to retire at 65 . Barry calculates that he can contribute $2,600 per year to his plan. Barry's employer will match this amount. If Barry can earn a return of 8% on his investment, how much will he have at retirement? At retirement, the amount Barry will have is $ (Round to the nearest dollar.)
Barry will have approximately $420,759 at retirement, assuming he contributes $2,600 per year to his retirement plan, with an 8% annual return and his employer matching the contribution.
To calculate the amount Barry will have at retirement, we can use the future value formula for a series of regular investments.
The future value (FV) of a series of regular investments can be calculated using the following formula
FV = P * [(1 + r)ⁿ - 1] / r
Where:
FV = Future value
P = Annual contribution
r = Interest rate per period
n = Number of periods
In this case, Barry contributes $2,600 per year, and his employer matches this amount. So the total annual contribution is $2,600 + $2,600 = $5,200.
The interest rate per period is 8%, or 0.08, and the number of periods is 65 - 35 = 30 (since Barry plans to retire at 65 and he is currently 35).
Now we can calculate the future value
FV = $5,200 * [(1 + 0.08)³⁰ - 1] / 0.08
Using a calculator, the future value comes out to approximately $420,759. So Barry will have around $420,759 at retirement (rounded to the nearest dollar).
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4. Under IFRS, "other comprehensive income" does NOT include
a) unrealized holding gains and losses on certain securities.
b) gains and losses on disposal of property, plant, and equipment.
c) gains and losses related to certain types of hedges.
d) certain gains and losses related to foreign exchange transactions.
5. Under IFRS, biological assets should normally be measured at
a) cost.
b) cost less accumulated depreciation.
c) fair value.
d) fair value less costs to sell.
9.Enviro Corporation had the following items as inventory as at December 31, 2020:
Item No. Quantity Unit Cost NRV
A1 130 $8.00 $8.40
B4 190 5.00 4.90
C2 190 12.00 12.90
D3 200 11.00 10.00
Assume that Enviro uses a perpetual inventory system and that none of the inventory items can be grouped together for accounting purposes. The year-end adjusting entry, applying Lower of Cost and NRV by individual items, should include a charge to cost of goods sold of
a) $219.
b) $188.
c) $35.
d) $0.
4. Under IFRS, "other comprehensive income" does NOT include the gains and losses on disposal of property, plant, and equipment (Option b)
5. Under IFRS, biological assets should normally be measured at fair value (Option c).
9. Therefore, the total charge to the cost of goods sold is $219 (option a)
4. .Other comprehensive income (OCI) refers to a component of a company's net income that arises from sources other than traditional profit or loss, such as unrealized gains or losses from certain securities, currency translation adjustments, pension adjustments, and gains or losses from certain derivative financial instruments.
5. Biological assets are plants or animals that a business cultivates or breeds in order to sell as products, such as crops, timber, or livestock.
Biological assets are typically valued at their fair value at each reporting date, less any costs that would be incurred to sell the asset. Fair value reflects the current market price for the assets.
9. The year-end adjusting entry, applying Lower of Cost and NRV by individual items, should include a charge to the cost of goods sold of $219 (Option a).NRV stands for net realizable value. In the context of inventory, it refers to the estimated selling price of an item less any estimated costs of completion and disposal.
The lower-of-cost-or-net realizable value (LCNRV) method is a way of valuing inventory that is often used in financial accounting to prevent inventory from being valued at more than it is worth.
In this case, the charge to the cost of goods sold for Item A1 will be $8.00 because the NRV is less than the cost, so the inventory is written down to the lower NRV value. For Item B4, there will be no adjustment because the cost is less than the NRV.
For Item C2, the charge to the cost of goods sold will be $190 because the NRV is less than the cost. For Item D3, the charge to the cost of goods sold will be $31 because the NRV is less than the cost.
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McDermitt Industries completed the following transactions during 2024: (Click the icon to view the transactions.) Journalize the transactions. Explanations are not required. Round to the nearest dollar. (Record debits first, then credits. Exclude explanations from journal entries.) Nov. 1: Made sales of $38,000. McDermitt estimates that warranty expense is 6% of slales. (Record only the warranty expense.) Nov. 1 Made sales of $38,000. McDermitt estimates that warranty expense is 6% of sales. (Record only the warranty expense.) Nov. 20 Paid $1,800 to satisfy warranty claims. Dec. 31 Estimated vacation benefits expense to be $4,500. Dec. 31 McDermitt expected to pay its employees a 6% bonus on net income after deducting the bonus. Net income for the year is $36,000.
McDermitt Industries recorded $2,280 in warranty expense on November 1, $1,800 for warranty claims, $4,500 for vacation benefits, and $2,160 for employee bonuses on December 31. The company's net income for the year was $36,000, and the employee bonus expense was calculated as 6% of net income.
To journalize the transactions for McDermitt Industries in 2024, the following entries can be made:
Nov. 1:
Warranty Expense 2,280
Sales 2,280
Nov. 20:
Warranty Claims Payable 1,800
Cash 1,800
Dec. 31:
Vacation Benefits Expense 4,500
Vacation Benefits Payable 4,500
Dec. 31:
Bonus Expense 2,160
Bonus Payable 2,160
Explanation of entries:
On November 1, McDermitt Industries made sales of $38,000 and estimates that the warranty expense is 6% of the sales. Therefore, a journal entry is made to record only the warranty expense of $2,280.
On November 20, McDermitt Industries paid $1,800 to satisfy warranty claims. This transaction is recorded by debiting the Warranty Claims Payable account and crediting the Cash account for the same amount.
On December 31, McDermitt Industries estimated the vacation benefits expense to be $4,500. This estimation is recorded by debiting the Vacation Benefits Expense account and crediting the Vacation Benefits Payable account for the same amount.
Also on December 31, McDermitt Industries expected to pay its employees a 6% bonus on the net income after deducting the bonus. As the net income for the year is $36,000, the bonus expense is calculated to be $2,160. This expense is recorded by debiting the Bonus Expense account and crediting the Bonus Payable account for the same amount.
Please note that these journal entries are provided based on the information given and rounding to the nearest dollar. Actual journal entries may vary depending on specific accounting policies and requirements.
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Consider a firm producing vaccinations using labour L and capital K. The price of labour is w and the price of capital is r. Assume production technology is given by y=AL^αK^β, where A represents the state of technology and α,β>0. Show the cost minimising combinations of L and K needed to produce 10 million and 20 million vaccinations on a graph, with K on the vertical axis and L on the horizontal axis. Stating your assumptions provide a sketch of the curve depicting the total cost function. Draw the associated marginal and average cost curves on a separate graph. Suppose the price of labour rises, what happens to the cost minimising combinations of L and K required to produce 10 million vaccinations? Clearly, illustrate your answer on your graphs to parts (a) and (b). Suppose instead that r and w rise in the same proportion. What happens to the cost-minimising combinations required to produce 10 million vaccinations? Illustrate the effect of the change in input prices on your graph of the total cost function in part (b).
In this scenario, we are considering a firm that produces vaccinations using labor (L) and capital (K) Cobb-Douglas production function. The price of labor is represented by "w," and the price of capital is represented by "r."
The production technology is given by the function y = [tex]AL^\alpha K^\beta[/tex], where A represents the state of technology, and α and β are positive parameters. We will analyze the cost-minimizing combinations of L and K required to produce different quantities of vaccinations, and how changes in input prices affect these combinations.
a) To begin, we want to determine the cost-minimizing combinations of labor (L) and capital (K) required to produce 10 million and 20 million vaccinations. In this case, we assume the firm wants to minimize its total cost while achieving the desired production levels.
To find the cost-minimizing combinations, we need to minimize the cost function, which is given by the product of the prices of labor and capital, multiplied by their respective quantities:
C = wL + rK
Given the production technology y = [tex]AL^\alpha K^\beta[/tex], we can rewrite it as:
y = [tex]AL^\alpha K^\beta[/tex]
Let's solve for K in terms of L and y:
y = [tex]AL^\alpha K^\beta[/tex][tex]K^\beta = (y / (AL^\alpha ))^{1/\beta}[/tex]
K = [tex](y / (AL^\alpha ))^ {1/\beta }[/tex]
Now we substitute this expression for K into the cost function:
C = [tex]wL + r[(y / (AL^\alpha ))^ {1/\beta }][/tex]
To plot the cost-minimizing combinations of L and K required to produce 10 million and 20 million vaccinations, we can set y = 10 million and y = 20 million, respectively, and plot the resulting combinations of L and K on a graph. The horizontal axis represents labor (L), and the vertical axis represents capital (K).
b) Next, we will sketch the curve depicting the total cost function. The total cost function (C) is given by:
C = [tex]wL + r[(y / (AL^\alpha ))^ {1/\beta }][/tex]
We assume that both w and r are positive constants. Since C is a function of L and K, we can plot it on a separate graph with the horizontal axis representing the quantity produced (y) and the vertical axis representing the total cost (C). We can choose different values of L and K to calculate the corresponding total costs and plot them on the graph. The resulting curve will show how the total cost varies with the quantity produced.
Additionally, we can also plot the associated marginal cost (MC) and average cost (AC) curves on a separate graph. The marginal cost is the derivative of the total cost with respect to quantity (MC = dC/dy), and the average cost is the total cost divided by the quantity (AC = C/y). By calculating the marginal cost and average cost at different levels of production, we can plot these curves to visualize their relationship with quantity.
c) Now, let's analyze the effect of an increase in the price of labor (w) on the cost-minimizing combinations required to produce 10 million vaccinations. When the price of labor rises, it becomes relatively more expensive compared to capital. As a result, the firm will seek to reduce its labor usage and increase its capital usage to minimize costs.
On the graph depicting the cost-minimizing combinations for 10 million vaccinations, we will observe a shift in the combinations towards higher capital (K) and lower labor (L) values. This shift represents the firm's adjustment to the higher price of labor in order to maintain its production level while minimizing costs.
d) Finally, let's consider the scenario where both
the price of labor (w) and the price of capital (r) rise in the same proportion. In this case, the relative prices of labor and capital remain constant. Consequently, the cost-minimizing combinations required to produce 10 million vaccinations will remain unchanged. The firm will continue to utilize labor and capital in the same proportion as before, as the cost-minimizing condition is unaffected by the change in input prices.
By analyzing the effects of changes in input prices on the cost-minimizing combinations, we gain insights into how firms make production decisions based on cost considerations and adapt to changes in the relative prices of labor and capital.
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Under a fair value hedge, the change in the fair value of the hedging derivative is
O ignored.
O reported under AOCl in the balance sheet.
O reported under retained earnings in the balance sheet.
O reported in the income statement.
Under a fair value hedge, the change in the fair value of the hedging derivative is reported in the income statement.
This is because a fair value hedge is used to offset the changes in the fair value of the hedged item due to specific risks that are being hedged. The purpose of a fair value hedge is to minimize the volatility in the income statement caused by changes in fair values. By reporting the change in the fair value of the hedging derivative in the income statement, allows for a more accurate reflection of the hedged item's fair value and ensures that the impact of the hedging transaction is properly accounted for in the financial statements.
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Defined as a system of values and beliefs in an organization that reinforces the idea that providing the customer with quality service is the principal concern of the business. Describe to me, what part in the management structure does the creation of a service culture start? How does it flow? Why is it important?
2. Human wants are the form human needs take as they are shaped by supply and demand.
Select one:
True
False
3. What are type of clues such as promotional material, employees and physical environment are used by the company to promote brand awareness?
Select one:
a. Intangible
b. Project Management
c. Tangible
d. Service Marketing
1. The part in the management structure where the creation of a service culture starts is the leadership. The management is responsible for creating a culture of service among employees.2. True. Human wants are the form human needs take as they are shaped by supply and demand , 3. physical environment that are used by the company to promote brand awareness are tangible clues.
It starts from the top level of management, and the flow goes downward. The managers lead by example, and they model the behavior that they want their employees to exhibit.
The message must be reinforced continuously with various activities, training, and development programs. A service culture is essential because it helps to improve customer satisfaction and loyalty.
It also helps the organization to become more productive and efficient, which leads to an increase in revenue.
2. True. Human wants are the form human needs take as they are shaped by supply and demand.
3. The type of clues such as promotional material, employees, and physical environment that are used by the company to promote brand awareness are tangible clues.
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The German potato grower’s association is concerned about increased competition from imported potatoes that are larger than those grown within Germany’s borders. The association wants to initiate a trade barrier. The president of the association must send a letter to the members explaining which trade barrier he thinks would help the German growers achieve their goal to reduce competition from imported potatoes.
A. Identify the trade barrier that you recommend? (5 Marks)
B. Discuss how this barrier will help potato growers achieve their goal? (5 Marks)
The recommended trade barrier to help the German potato growers reduce competition from imported potatoes is imposing a tariff or import duty on imported potatoes based on their size or weight.
A. The recommended trade barrier to help the German potato growers reduce competition from imported potatoes is imposing a tariff or import duty on imported potatoes based on their size or weight.
B. This trade barrier would help potato growers achieve their goal by increasing the cost of imported potatoes that are larger in size or weight. By imposing a tariff, the price of imported potatoes would rise, making them less competitive in the domestic market compared to locally grown potatoes. This would create a price advantage for the German potato growers, as their smaller-sized potatoes would be relatively cheaper. Consumers would be more likely to choose the domestically produced potatoes due to their lower price, thus reducing demand for imported potatoes. Additionally, the tariff would act as a barrier to entry for foreign producers, discouraging them from exporting larger potatoes to Germany. As a result, the trade barrier would provide a level of protection to the German potato growers, allowing them to maintain or increase their market share and reduce competition from imported potatoes.
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The present worth of taxes is less for accelerated depreciation
methods.True or false ?
The statement "The present worth of taxes is less for accelerated depreciation methods" is true. Accelerated depreciation methods result in a lower present worth of taxes compared to straight-line depreciation.
Accelerated depreciation methods allow for larger deductions in the earlier years of an asset's life, resulting in a higher depreciation expense upfront. This reduces the taxable income in the early years, leading to lower tax payments and a lower present worth of taxes. With accelerated depreciation methods, such as double-declining balance (DDB) or sum-of-the-years'-digits (SYD), the depreciation expense is higher in the early years and gradually decreases over time. This front-loading of deductions provides a tax benefit by reducing taxable income and tax liability in the earlier years.
In contrast, straight-line depreciation allocates an equal amount of depreciation expense over the useful life of the asset, resulting in a consistent tax deduction and tax liability throughout the asset's life. The lower depreciation deductions in the early years of straight-line depreciation lead to higher taxable income and tax payments, resulting in a higher present worth of taxes compared to accelerated depreciation methods. Therefore, the statement that the present worth of taxes is less for accelerated depreciation methods is true.
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The stock of the Madison Travel Co. is selling for $31 a share. You put in a limit buy order at $25 for one month. During the month the stock price declines to $20, then jumps to $38. Ignoring commissions, what would have been your rate of return on this investment? Round your answer to two decimal places. ___ %
What would be your rate of return if you had put in a market order?
Round your answer to two decimal places. ___%
What if your limit order was at $17?
Since the market ____ to $17 the limit order ____
Ignoring commissions, the rate of return on the investment for the given scenario would have been 52.38%. If a market order was placed, the rate of return would have been 22.58%. If the limit order was set at $17, it would not have been triggered since the stock did not decline to that price.
In the given scenario, the initial limit buy order was placed at $25, but the stock price declined to $20 before jumping to $38.
To calculate the rate of return, we need to determine the final value of the investment and compare it to the initial investment.
If the limit order at $25 had been executed, the investment would have been made at $25 per share. With the stock price reaching $38, the investment would have grown to $38.
Therefore, the rate of return would be calculated as
[(Final Value - Initial Investment) / Initial Investment] * 100,
which is [(38 - 25) / 25] * 100 = 52.38%.
On the other hand, if a market order had been placed, the investment would have been made at the prevailing market price of $31 per share.
With the stock price reaching $38, the rate of return would be calculated as
[(Final Value - Initial Investment) / Initial Investment] * 100,
which is [(38 - 31) / 31] * 100 = 22.58%.
Lastly, if the limit order had been set at $17, it would not have been triggered because the stock price did not decline to that level during the given period.
It's important to note that commissions and fees were ignored in this calculation. In practice, transaction costs would affect the actual rate of return on the investment.
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Exercise 19-15 Taxable income and pretax financial income would be identical for Huber Co. except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations have been prepared Taxable income 2016 2017 2018 Excess of revenues over expenses (excluding two temporary differences) Installment gross profit collected $160,000 $210,000 $90,000 8,000 8,000 8,000 Expenditures for warranties (5,000) (5,000) (5,000) Taxable income $163,000 $213,000 $93,000 Pretax financial income 2016 2017 2018 Excess of revenues over expenses (excluding two temporary differences) Installment gross profit recognized Estimated cost of warranties $160,000 $210,000 $90,000 24,000 (15,000) Income before taxes $169,000 $210,000 $90,000 The tax rates in effect are 2016, 40%; 2017 and 2018, 45%. All tax rates were enacted into law on January 1, 2016. No deferred income taxes existed at the beginning of 2016, Taxable income is expected in all future years. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2016, 2017, and 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
To record income tax expense, deferred income taxes, and income taxes payable for 2016, 2017, and 2018, journal entries are made based on the differences between taxable income and pretax financial income.
To prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2016, 2017, and 2018, we need to calculate the income tax expense and the deferred tax liability or asset for each year based on the taxable income and pretax financial income differences. Here is the journal entry:
2016:
Income Tax Expense ([$163,000 - $169,000] * 40%) 2,400
Deferred Tax Liability ([$169,000 - $160,000] * 40%) 3,600
Income Taxes Payable ([$163,000 - $169,000]) 6,000
Deferred Tax Liability 3,600
Income Tax Expense 2,400
2017:
Income Tax Expense ([$213,000 - $210,000] * 45%) 1,350
Deferred Tax Asset ([$210,000 - $210,000] * 45%) 0
Income Taxes Payable ([$213,000 - $210,000]) 3,000
Income Tax Expense 1,350
Income Taxes Payable 3,000
2018:
Income Tax Expense ([$93,000 - $90,000] * 45%) 1,350
Deferred Tax Asset ([$90,000 - $90,000] * 45%) 0
Income Taxes Payable ([$93,000 - $90,000]) 3,000
Income Tax Expense 1,350
Income Taxes Payable 3,000
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Accepting Business at a Special Price
Forever Ready Company expects to operate at 82% of productive capacity during July. The total manufacturing costs for July for the production of 31,980 batteries are budgeted as follows:
Direct materials $506,700
Direct labor 186,300
Variable factory overhead 52,134
Fixed factory overhead 104,000
Total manufacturing costs $849,134
The company has an opportunity to submit a bid for 3,000 batteries to be delivered by July 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during July or increase the selling or administrative expenses.
What is the unit cost below which Forever Ready Company should not go in bidding on the government contract? Round your answer to two decimal places.
$fill in the blank 1 per unit
To determine the unit cost below which Forever Ready Company should not go in bidding on the government contract, we need to calculate the incremental cost per unit for the additional 3,000 batteries.
The incremental cost includes only the direct materials, direct labor, and variable factory overhead, as the fixed factory overhead and other expenses are unaffected by the contract. By dividing the total incremental cost by the quantity of batteries, we can find the unit cost threshold for bidding on the contract.
To determine the incremental cost per unit for the additional 3,000 batteries, we only consider the direct materials, direct labor, and variable factory overhead. The respective costs for these items are $506,700, $186,300, and $52,134. Summing these costs, we get $745,134 for the additional 3,000 batteries.
Dividing the incremental cost by the quantity of batteries, the unit cost below which Forever Ready Company should not go in bidding on the government contract is $745,134 / 3,000 = $248.38 per battery, rounded to two decimal places. Therefore, the answer is $248.38 per unit.
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Soar incorporated is considering etiminating its mountain bike division, which reported an operating loss for the recent year of $6,000, The division sales for the year were $1,060,000 and the variable costs were $863,000. The fived costs of the division were $203,000. If the mountain bike drislon is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be: Multiple Chaice 560,900 decrease $136,100 decrease $54,900 decrease $197.000 increase $197,000 decrease
The impact on operating income for eliminating the mountain bike division would be a $197,000 decrease.
To determine the impact, we need to calculate the contribution margin of the mountain bike division, which is the sales revenue minus the variable costs. In this case, the contribution margin is $1,060,000 - $863,000 = $197,000.
If the division is eliminated, 30% of the fixed costs ($203,000 * 0.30 = $60,900) can be eliminated. Since the division reported an operating loss of $6,000, we subtract the eliminated fixed costs from the operating loss: $6,000 - $60,900 = -$54,900.
Therefore, eliminating the mountain bike division would result in a decrease of $54,900 in operating income.
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You are currently making R20 000 after tax. You realised of the R20 000 you only have R300 at the end of the month to save after all your other financial obligations. You are considering two different options. Option A: You can invest in the stock market where the value per share grows by an effective yearly rate of 10%. Option B: you can put your money into the bank at a nominal yearly rate of 8%
You want to know the effect that compounding interest has on your bank account. So you want to find out what percentage of your monthly growth comes from interest compared to the R300 you add yourself. What interest do you thus earn in month 180 - or after 15 years (assume the effective monthly rate is 0.7% )?
If inflation is 5% over the 45 years, how much would the last month's increase be (both interest and the R300 deposit at the end) in today's value?
After 15 years of investing either in the stock market (Option A) with a 10% effective yearly growth rate or in a bank account (Option B) with an 8% nominal yearly rate, you want to calculate the interest earned in the 180th month.
To calculate the interest earned in the 180th month, we can use the compound interest formula:
Future Value = Principal × (1 + Interest Rate)^Time
In this case, the future value is the R300 deposit, the interest rate is the effective monthly rate of 0.7%, and the time is 180 months. By plugging in these values, we can calculate the interest earned.
To determine the increase in the last month in today's value, we need to account for inflation. Assuming a 5% inflation rate over the 45 years, we can use the concept of present value to adjust the future value to today's value.
By discounting the future value using the inflation rate, we can find the value of the increase in today's purchasing power.
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the system vision document is usually developed before the project actually begins.
true or false
The given statement is TRUE because a vision document is generally developed before actually beginning the project.
What is a vision document?The vision document contains information regarding the system's objectives, project description, use cases, system components, and technical constraints.
It provides a clear understanding of the system and the direction the project will take. By outlining the project's vision, the team can focus on what is necessary to achieve the project's objectives and goals.
The system's vision document is a document that outlines the objectives, goals, scope, and constraints of the project. It assists stakeholders and the project team in having a clear understanding of what the project will accomplish and how it will do so.
Hence, we can conclude that the vision document for establishing any system in the organisation is usually developed before the project begins its operations.
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Today, you are retiring. You have a total of $413,926 in your retirement savings and have the funds invested such that you expect to earn an average of 3%, compounded monthly, on this money throughout your retirement years. You want to withdraw $2,500 at the beginning of every month, starting today. How long will it be until you run out of money?
The retirement savings will last around 14 years and 4 months, considering the initial amount of $413,926, monthly withdrawals of $2,500, and a 3% average annual return compounded monthly.
To determine how long the retirement savings will last, we can calculate the future value of the monthly withdrawals and compare it to the initial retirement savings. The future value is the accumulated amount of the withdrawals and the returns earned on the remaining balance.
Using the formula for future value of an ordinary annuity, we can calculate the number of periods (months) it will take for the future value to equal or exceed the initial retirement savings.
The future value formula is:
FV = P x [[tex](1 + r)^{n - 1[/tex]] / r
Where:
FV = Future value of the annuity
P = Monthly withdrawal amount
r = Monthly interest rate
n = Number of periods (months)
P = $2,500, r = 0.03/12 (monthly interest rate), and FV = $413,926.
By rearranging the formula and solving for n, we can find the number of periods:
n = log(1 + (FV x r) / P) / log(1 + r)
Substituting the values, we can calculate that it will take approximately 14 years and 4 months (or 172 months) until the retirement savings are depleted.
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Mr Lenhle Nkosi is the CEO of Inhle' Investments Family Trust holds a transport business and properties. The main business entity in the Family Trust is the transport stream which did very well before Covid-19 pandemic in 2019, but things turned out sour for a while now. They are losing money and the Founder is not sure how much longer they can keep the doors open. As it turns out, the Founder has approached your group for Management Practice advice. With your advice as Management Practice Consultant, the organization has continued to make strategic planning progress. In this light, you and the CEO realize that a new organizational structure is needed for the organization to grow as you envision. Plans include expanding beyond current scope of business and reaching new markets. The following is a summary of the current staff:
Operator Manager
Warehouse Manager
Book-keeper
Drivers
Preparation The Organizational structure/design module in your prescribed text book provides numerous examples and illustrations of organizational structures. As a Management Consultant / Advisor, your role is now to select one of the organizational structures that fits well with the organization - describe how it works, draw the future organizational chart diagram using the information above and explain why you prescribe it.
The following steps will help you prepare for your written assignment:
- Carefully consider the various organizational structures, their key components relevant for the organization based on the information above.
- Consider the internal factors and external environmental factors, including current trends.
Your task as a group
1. Select one of the organizational structures from your prescribed textbook.
2. Create a future organizational chart for the organization. There are numerous organizational chart format inserts available in popular software. Microsoft Word and PowerPoint have Hierarchy charts found on the Insert tab under SmartArt. Your organizational chart should contain the title of the job function, even if no Inhle' Investments employee currently fills that role. You may also recommend a reporting structure for the existing employees within the new structure.
3. Write at least one and half page deseribing your chosen structure and why you selected it. Your written explanation must include four properly referenced journal articles to support your ideas, including defined terms from the module reading about organizational structure and design. For example, if you select a functional structure, you must explain each relevant function - support your ideas with paraphrased information from journal articles. Use TUT's in-text style of referencing.
The selected organizational structure for Inhle' Investments Family Trust is a Divisional Structure.
A Divisional Structure is suitable for Inhle' Investments as it allows for the organization to expand and diversify into new markets beyond its current transport business.
It involves dividing the organization into separate divisions based on products, services, or geographic regions. Each division operates independently and has its own functions such as operations, finance, and marketing, allowing for better focus and responsiveness to specific market needs. The organizational chart would include divisions such as Transport Division, Property Division, and possibly new divisions for expanded business ventures.
This structure enables efficient resource allocation, and better coordination within divisions, and facilitates growth and expansion into new markets.
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